The European Union is set to scrap plans to restrict exports to five Chinese companies with alleged ties to Russia, in a move to break a stalemate over its latest sanctions package targeting Moscow.
(Bloomberg) — The European Union is set to scrap plans to restrict exports to five Chinese companies with alleged ties to Russia, in a move to break a stalemate over its latest sanctions package targeting Moscow.
The bloc removed the firms from a proposed list of companies to target for allegedly supplying Russian firms with banned technologies after assurances from Chinese officials, according to a person familiar with the matter. Plans to curb trade with three Hong Kong-based firms are still on the table, the person added.
The changes, which could still be modified again before approval by member states, were first reported by the South China Morning Post.
Separately, a proposed mechanism to target countries that aren’t doing enough to prevent Russia from evading export restrictions has also been watered down. The primary aim of the tool would be to deter governments from helping Russia in the wake of its invasion of Ukraine.
But if diplomatic pressure proves ineffective, the mechanism would give member states the power to adopt targeted export restrictions on key goods as a second step. It would feature two lists: one of restricted goods, and the other of countries which the listed items can’t be sent to.
The scope of both lists has been narrowed following pressure from several member states including France and Germany, raising the bar for when it can be deployed. EU officials are hopeful that the sanctions package can be approved next week and diplomats could meet Monday morning, according to two people familiar with the issue.
The main aim of the EU’s 11th sanctions package, which the bloc has been debating for weeks, is to tighten loopholes and tackle circumvention. Other measures include a ban on many goods transiting through Russia as well as further trade restrictions, including on more technological goods, formalizing an end to oil deliveries through the northern leg of the Druzhba pipeline, and intellectual property curbs.
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